Dell Special Committee Asks Carl Icahn For More Details

Dell Inc. (NASDAQ:DELL) special committee today sent a letter to billionaire investor Carl Icahn and Southeastern Asset Management, asking them to provide more information about their proposal. The special committee said that it won’t engage into talks before it makes sure that their proposal is credible.

A week earlier, the committee had asked them for more information about their proposal. Last week, Dell reported yet another disappointing quarterly result. It’s the six consecutive quarterly decline in earnings.

Icahn Criticizes Dell Team

Mr. Icahn and Southeastern offered that Dell Inc. (NASDAQ:DELL) shareholders will receive $12 dividend in cash or stock, and shareholders will retain their stake in the company, enjoying additional benefits from any potential upside. In the same letter, Mr. Icahn criticized the computer maker, saying that it is led by a “wrong headed” team. Mr. Icahn went on to say that if the Dell board doesn’t support their offer, Mr. Icahn and Southeastern will appoint new directors to replace the current board. But their offer didn’t provide any details about how they will finance the deal.

No Questions Answered

The committee asked in the last week’s letter whether their offer is an actual buyout proposal or an alternative to be considered if Michael Dell and Silver Lake Partners’ deal isn’t approved. The special committee also made several queries about how Mr Icahn and Southeastern would finance the deal, provide working capital, and who the top management team would be. Neither Mr. Icahn nor Southeastern Asset Management has responded to the letter so far.

In today’s letter, the committee reiterated that it needs to determine whether Mr. Icahn’s proposal would result into a superior deal than the existing offer of $13.65 a share by Michael Dell and Silver Lake Partners, otherwise it may not engage in talks or provide additional information. If the committee doesn’t engage in talks with Carl Icahn and Southeastern, Michael Dell’s current offer is likely to go on vote. The Blackstone Group L.P. (NYSE:BX) had also made a $25 billion offer for Dell Inc. (NASDAQ:DELL), but it dropped the bid as the PC industry continued to disappoint.